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You are given the following information about the shares of Trunk.
Cover: 2.4
Yield: 3.0%
Market Price: $1.80
What is the P/E ratio for the company? The price earnings ratio can be derived from share price/earnings per share. Earnings per share can be derived from: Net profits/ (loss) attributable to ordinary shares.I would appreciate some explanation on this as well. Thanks, Shams
The dividend yield is: dividend/market price.
So the dividend per share = 3% x $1.80 = $0.054Dividend cover is: earnings per share/dividend per share
So the earning per share = 2.4 x $0.054 = $0.1296PE ratio is: market value / earning per share = 1.80 / 0.1296 = 13.89
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